Online Sales Cannibalizing Retail? Nope, Says PwC

Despite the continued strength of e-commerce and the constant lamentations from retailers about showrooming and online cannibalization, new data from
consultants PwC shows that shoppers are actually spending more with their favorite multichannel retailers.

The report, which included more than 11,000 shoppers in 11 different
countries, also debunks the threat of showrooming, and finds that while 23% of its respondents research consumer electronics online and then go to a store to buy the product, only 2% do it the other
way around.

A: I tend to look at things as a whole. Technology is
clearly creating a lot of change, and it’s easy to look at any one data point and go right to the hyperbole, around things like showrooming cannibalization. But these changes are evolutionary.
There are no U-turns. Beyond the myth and the hype, patterns are shifting, but there’s still plenty of time for retailers to get on board.

Q: Another myth you guys put
to rest is this idea of an emerging global consumer -- that since we are all shopping on the same Internet, we are becoming increasingly alike. Can you explain?

A: Yes, no matter how global multichannel retailing is getting, we see little evidence for a global pattern of consumer habits or preferences. There aren’t even many
similarities in developed markets. We’re so used to the segments here in the U.S., we understand that there are the haves and the have-nots, that there are gender differences, and that even
beyond demographics there are behavioral differences -- impulse shoppers versus bargain hunters, for example. But even though we understand that about the U.S., there’s this tendency to think
other countries will be all the same. And they’re not.

Q: Are there overlooked opportunities there?

A: In
many markets, people are just emerging as consumers -- they are just learning. So while you can’t make assumptions about them, you do get to help them define their preferences.

Q: Can you comment specifically on food marketers and retailers, who seem to have to play to more cultural differences than other stores?

A: Again, not every grocery shopper is the same, and we’ve recently published some new insights on that as well. But there are similarities across the board, and we
know that above all, food shoppers want expediency and service. Some demographics will actually pay quite a bit more in order to have more knowledgeable people in stores. So again, success requires
great profiling of what customers want and expect. One of the things that didn’t fall high on the priority list is technology. They want an efficient checkout, but they want an attendant
there.

Q: Okay, so back to cannibalization -- the idea that because a shopper can buy anything online, and online sales are rising, that must mean they are spending less in
physical stores.

A: The idea that selling online takes away from your physical store just doesn’t hold up. In the U.S., 56% of shoppers are spending
more money with their favorite retailers since shopping across multiple channels. In Russia, it was 49%. And in Brazil, 68%. The catch is that they have to be in the preferred circle of multichannel
retailers. So stores shouldn’t shy away from these channels. If you delight consumers, they’ll spend more.